We Can All Agree That DoorDash Sucks, Right?

Remember the "old days" of ordering takeout? You’d grab a worn, stained paper menu from a kitchen drawer, dial a number from memory or a fridge magnet, and chat with a person who knew the restaurant’s specials by heart. You placed your order, hopped in the car, and a few minutes later, you were greeted by the warm aroma of your meal and a familiar face at the pickup counter. That was the transaction: direct, simple, and the restaurant kept every dollar you handed over. Then delivery came along, and you could order a pizza from the comfort of your couch and get it handed to you at your door. My favorite place to get pizza as a kid was Dimitri’s in New Milford, CT. They would deliver to the playground! We’d hand the driver cash, and I hope we tipped well.

Today, that very simple interaction has been replaced by a frictionless, digital one. With a few taps on an app, you can have anything from a taco to a gourmet pizza delivered to your door. This convenience is transformative, but it comes at a significant cost that’s reshaping the restaurant industry and challenging the economic viability of the very businesses we love. The smooth, digital facade of these delivery platforms hides a complex reality of high fees, thin margins, and a fragile labor model.

The Math Doesn't Lie: A Restaurant's Struggle for Profit

For a restaurant, profitability is a delicate balancing act. After factoring in core expenses—such as a staggering 25-40% for labor, 25-35% for food costs, and a consistent outlay for rent, utilities, and insurance, the typical profit margin for a restaurant is a slim 3-6%. Every dollar counts.

This is where the third-party delivery services like DoorDash and Uber Eats enter the equation. While they promise increased customer reach, their business model is built on substantial commission fees that directly erode these already tight margins. These fees typically range from 15% to over 30% of an order's total value, depending on the service tier a restaurant subscribes to.

Consider a simple scenario: A restaurant sells a $50 dinner through a delivery app that charges a 30% commission. That's $15 immediately deducted before the restaurant can even account for the cost of the ingredients or the wages of the chef who prepared the meal. To compensate, many restaurants are forced to increase their prices on these platforms, which means consumers often pay more for the same meal delivered than they would for dine-in or direct pickup. It’s a transaction that often leaves both the restaurant and the consumer with less. This is not sustainable.

A Fragile Foundation: The Gig Economy's Impact on Labor

The challenges don't end with the restaurant. The driver who brings your food, a crucial link in the chain, operates as a 1099 independent contractor. This classification means they are not employees and are not entitled to a guaranteed minimum wage, benefits, or expense reimbursement. They bear the full cost of their work, including:

• Fuel

• Vehicle maintenance and depreciation

• Insurance

• Taxes

The driver's base pay from the platform is often minimal, with their take-home earnings heavily reliant on customer tips. This creates a precarious, unpredictable income stream, where low-paying or long-distance deliveries can result in a net loss once vehicle expenses are factored in. The very system built on convenience for the end user often relies on a difficult and financially unstable reality for the person at the other end of the transaction. And some of these people don’t even tip! It’s wild.

The next time you open a delivery app, take a moment to consider the entire ecosystem behind that convenient transaction. The price you see reflects not only the cost of the food but also a hidden commission that affects a restaurant’s bottom line and a compensation structure that places the financial burden on the delivery driver. Choosing to order directly from a restaurant or opting for pickup can be a simple but powerful way to ensure that more of your money directly supports the businesses and people who work hard to bring great food to your table.

At besti, we’re building something different. Something that brings back the simplicity of ordering take-out or delivery and doesn’t take cumulative billions out of the pockets of hard-working business owners.

Want to know how you can help? Reach out to partners@besti.us.

- James